Small Business Loans
 
Trying to get small business loans can be a  tricky process both for existing businesses and for those just starting out.    

When looking around for the best deals on small business loans it really pays to consider all of your options. Most people will start with the big high street banks that they know and feel that they can trust. Whilst these banks can offer a wide range of products, and may well come up with the loan that you are looking for you should not take the first offer that you get. The large high street banks are usually cautious about lending for business, and sometimes it feels as if you need to prove that you don't need the money in order to get it.

The great thing about the financial market today compared with say 10 years ago is the increased competition that the large banks have. The large number of lenders now offering small business loans has given the borrower greater choice, and has forced the banks to offer better deals and become more proactive in their lending.

Companies specialising in small business loans such as Kreative are a great place to source finance without having to jump through quite as many hoops. The other great advantage with this is that an existing loan becomes a great bargaining tool later on. When you borrow money from any lender you should work on building a good payment history and a good relationship. This will give you the ability to negotiate a better rate or deal on either the existing finance or on a new small business loan.

Most high street banks will give the impression that the rates offered on their small business loans are not negotiable. This is generally only the case if they feel you do not have the ability or intention to source the funding elsewhere. It is always worth trying to push them for a better rate, after all the worst thing that can happen is that they will say no.

With my past experience in trying to obtain small business loans I have found it better to avoid the high street banks when starting out. Once your business is established the banks are much more likely to help out. Having traded for a while, the high street banks will not see you as so much of a risk and you will also be more confident in you own ability, and you will have some figures to show (which the banks love). 

By taking initial funding through a specialist company such as Kreative Solutions you are able to establish a loan history with a more risk friendly lender and then switch to the high street banks (if you can get a better deal) later on. Whichever lender you decide to approach you must make sure that they are giving you the best deal possible, always try to negotiate the rate down. You should also check to see if there are any redemption penalties for repaying early. Some small business loans, like some mortgages, penalise you for repaying the loan before the end of the agreed term. This type of penalty is becoming less common in the more competitive environment but still exists.

If you have no choice but to accept a small business loan with higher than average interest rates and with a redemption penalty do not despair.  It is probably better to take a loan like that if it is the difference between getting or missing a good opportunity. It will at least get you started and once established you can shop around for a better deal.